Why the Purchases Account Doesn’t Appear in the Income Statement

Here is an explanation of why the Purchases account does not appear in the income statement.

Answer:

• Purchases are not displayed as a separate account in the income statement.
• If the purchased products are inventoried, their value is recorded in the Inventory account.
• If the products are not inventoried, their value is recorded in the Expense account at the time of purchase.